What is the First Thing You Should Do If You Win The Lottery?
When you win the lottery, there are certain smart things that you need to do to maintain your winnings. Winning the jackpot does not mean you won’t ever have to worry about money again. You need good money management to live comfortably for the rest of your life.
We list the top 8 smart things to do when you win the lottery. These tips will help you develop smart habits for money management.
Top 8 Things to Do When you Win the Lottery
1. Stay Anonymous
If your state allows it, it’s better to remain anonymous. When people find out that you have won the jackpot, you’ll be inundated with requests for money. So, keeping quiet about your winnings is a good idea.
The rules on winners staying anonymous will differ based on the state you’re living in. for example, in New York, lottery winners are publicly recorded. However, the rules might be different if you live in another state.
2. Consult a Tax Professional Before you Cashout
You’ll have the choice to claim your winnings all at once or get them in installments. You’ll have to pay the tax immediately when you claim the whole lump sum. However, when you get the winnings in installments, you will pay tax as you receive the money. It’s a good idea to consult a professional who will advise you on the best way to cash out.
3. Don’t Change your Lifestyle Drastically
Don’t change your lifestyle drastically the first six months after you win the lottery. For example, some winners quit their jobs or buy flashy assets immediately. Setting some money aside to celebrate your win is a good idea. Make sure the big purchases are saved for later before making significant commitments.
4. Settle all Your Debts
Before making any big purchases, ensure your debts are fully paid. Then you can focus on investing your money without the burden of loans and interest rates. Once you’ve claimed your cash, make sure you have paid all your debts.
5. Consult Legal and Financial Experts
In a situation where you have won much money, It’s challenging to differentiate between good and bad people. Finding a group of professional advisors who will help you spend your money wisely is a good idea. So, it would be best if you found a lawyer, an accountant, and an investment manager.
6. Invest Wisely
When you have claimed your winnings, invest the money wisely. Some financial experts recommend investing the money into a six-month short-term savings plan. This will help you decide what you want to do with the money and get you to earn a bit of interest while thinking.
Don’t use investment plans you don’t understand or those that sound too good to be true. Ask your team of advisors to recommend investment plans that will be suitable for you and your family.
7. Stick to a Budget
When you’re not used to having much money, it’s a good idea to stick to a budget. Don’t go on spending sprees without investing your money. One of the ways to limit yourself from spending much money is to spend income and not the principal.
8. Give to Charity
When you give to charity, you can offset some of the taxes imposed on your winnings. Giving to charity will also allow you to claim back from tax rebates at a federal level.